Icici Prudential Life Insurance Co. Ltd. · NSE:ICICIPRULI
Icici Prudential Life Insurance — H1-FY2025 Earnings Presentation
71 slides from Icici Prudential Life Insurance's earnings presentation, Oct 22, 2024
Slide 1: Performance update: H1-FY2025
Performance update: H1-FY2025 October 22, 2024
Slide 2: Agenda
Agenda • Company strategy & performance • Opportunity & industry overview
Slide 3: Agenda
Agenda • Company strategy & performance • Opportunity & industry overview
Slide 4: 3C Framework
3C Framework Customer centricity Competency Catalyst Comprehensive product suite ESG integrated with Customer business management centricity People Tech Analytics Diversified Operational distribution efficiency Risk & Prudence Deliver sustainable VNB growth by balancing business growth, profitabilit
Slide 5: Performance snapshot: H1-FY2025
Performance snapshot: H1-FY2025 APE 13M Persistency1 VNB ₹ 44.67 bn CY: 89.8% ₹ 10.58 bn 26.8% Y-o-Y growth PY: 86.9% 23.7% VNB margin RWRP Claim settlement2 Profits after tax ₹ 36.66 bn Overall: 99.8% ₹ 4.77 bn 39.2% Y-o-Y growth Individual: 99.3% 5.8% Y-o-Y growth Cost/TWRP: Total premium Embedded
Slide 6: 3C Framework
3C Framework Customer centricity Competency Catalyst Comprehensive product suite ESG integrated with Customer business management centricity People Tech Analytics Diversified Operational distribution efficiency Risk & Prudence Deliver sustainable VNB growth by balancing business growth, profitabilit
Slide 7: RWRP growth vs. industry
RWRP growth vs. industry RWRP Q3-FY2024 Q4-FY2024 Q1-FY2025 Q2-FY2025 (Y-o-Y growth) Overall industry 5.9% 0.3% 19.7% 21.3% Private industry 9.4% 2.4% 23.8% 23.9% ICICI Pru Life 10.0% 11.5% 46.8% 33.9% Outperformed private & overall industry over the last four quarters RWRP: Retail Weighted Received
Slide 8: Product wise growth (APE)
Product wise growth Q2- Y-o-Y H1- Y-o-Y Q2- H1- Segments FY2025 Growth FY2025 Growth FY2025 FY2025 Savings 20.82 24.5% 36.90 32.3% 83.2% 82.6% Linked 12.98 40.0% 23.06 54.5% 51.8% 51.6% Non-linked 4.78 (10.2%) 8.09 (13.6%) 19.1% 18.1% APE (₹ billion) Annuity 2.18 73.0% 4.33 99.5% 8.7% 9.7% Mix Group
Slide 9: Channel wise growth (APE)
Channel wise growth Q2- Y-o-Y H1- Y-o-Y Q2- H1- Channels FY2025 Growth FY2025 Growth FY2025 FY2025 Agency 7.80 43.9% 13.57 51.1% 31.2% 30.4% Direct 3.96 33.3% 6.94 36.3% 15.8% 15.5% APE (₹ billion) Bancassurance 7.36 27.1% 13.01 30.0% 29.4% 29.1% Mix Partnership distribution 2.48 (15.6%) 4.75 0.0% 9
Slide 10: Product & Distribution mix: H1-FY2025
Product & Distribution mix: H1-FY2025 Product mix Distribution mix 3% | Group funds 14% | Group 30% | Agency 10% | Annuity 52% | Linked 11% | 17% | Partnership Protection distribution 29% | 18% | Non-linked Bancassurance 16% | Direct Well diversified product & distribution mix Based on Annualised Pr
Slide 11: Segment in focus: Protection & Annuity
Segment in focus: Protection & Annuity Protection Annuity H1- H1- H1- H1- (₹ billion) (₹ billion) FY2024 FY2025 FY2024 FY2025 Protection APE1 7.34 7.76 Annuity APE 2.17 4.33 Retail protection APE 2.38 2.79 Sum assured 4,913.83 5,673.02 Annuity mix3 6.2% 9.7% Sum assured market share2 11.1% 11.1% Pro
Slide 12: Persistency improvement
Persistency improvement Month H1-FY2024 FY2024 H1-FY2025 13th month 86.9% 88.7% 89.8% 25th month 78.9% 79.7% 81.0% 37th month 72.2% 72.0% 73.7% 49th month 67.7% 70.7% 69.9% 61st month 66.1% 65.6% 65.9% Consistent improvement in persistency ratios Regular & Limited pay persistency in accordance with
Slide 13: Productivity improvement
Productivity improvement (₹ billion) H1-FY2024 H1-FY2025 Y-o-Y Growth Total APE 35.23 44.67 26.8% Total expenses 34.32 42.80 24.7% Cost/Total Premium 19.3% 22.0% - Cost/TWRP1 26.2% 29.4% - Cost/TWRP1 (savings LOB) 17.2% 17.9% - Continued investment in capacity creation to support future growth 1Tota
Slide 14: Resilient balance sheet
Resilient balance sheet Insurance risks Strong solvency ratio • Persistency experience & mortality • Solvency ratio of 188.6% at September 30, experience monitored regularly 2024 • Approval from Board to raise additional sub debt of ₹ 14.00 bn High quality assets1 Liability profile1 • 96.4% of fixed
Slide 15: Financial metrics
Financial metrics (₹ billion) H1-FY2024 FY2024 H1-FY2025 Value of New Business 10.15 22.27 10.58 VNB margin 28.8% 24.6% 23.7% Profit after Tax 4.51 8.52 4.77 Solvency ratio1 199.4% 191.8% 188.6% AUM1 2,719.03 2,941.40 3,204.91 1 H1: At September 30 of respective financial years; FY: At March 31 VNB:
Slide 16: Embedded value (EV)
Embedded value (EV)1 460.18 423.37 385.29 140.32 356.34 115.80 95.66 87.82 ` billion ` billion 319.86 307.56 289.63 268.52 Mar-23 Mar-24 Sep-23 Sep-24 Value of Inforce (VIF) Adjusted net worth (ANW) Continued strong growth in EV 1As per Indian Embedded value (IEV) method Total may not add up due to
Slide 17: 3C Framework
3C Framework Customer centricity Competency Catalyst Comprehensive product suite ESG integrated with Customer business management centricity People Tech Analytics Diversified Operational Deliver superior customer distribution efficiency value through appropriate product propositions, seamless onboar
Slide 18: Customer centricity at the core
Customer centricity at the core ~85% of policies issued using Industry leading claim digital KYC1 in H1-FY2025 Ranked no. 1 in the industry settlement ratio of 99.3% for wide customer experience NPS ~48% of savings policies issued H1-FY20252; settled within study for 2nd year in a row4 on same day i
Slide 19: 'C'ompetency: Comprehensive product suite
‘C’ompetency: Comprehensive product suite • Provide right product to right customer • Offer innovative product propositions addressing dynamic customer needs across life stages Comprehensive product suite ESG integrated with Customer business management centricity People Tech Analytics Diversified O
Slide 20: Products across life stages
Products across life stages… Married with Nearing retirement Young & single Married children & retired • Protection • Protection • Protection • Retirement planning • Savings • Health • Child education • Pension • Savings • Retirement planning • Legacy planning • Wealth • Health • Wealth Age 25 - 30
Slide 21: …catering to varied customer needs
…catering to varied customer needs Linked Part Guaranteed Guaranteed Long-term Life savings protection Customer needs Retirement Healthcare planning Available to sell products compliant with IRDAI (Insurance Product) Regulations, 2024 21
Slide 22: Innovation across product categories
Innovation across product categories Protection & Savings Annuity & Pension Health • Simple cost-efficient plan with the flexibility to choose level of protection between SA, fund value or combination of both • Industry 1st feature* that • Industry’s 1st annuity • Enhances customer • Increasing inco
Slide 23: 'C'ompetency: Diversified distribution
‘C’ompetency: Diversified distribution • Create depth & width in multi partner shops • Invest & grow in proprietary channels • Deeper penetration in micro markets • To be the “most partnerable insurer” Comprehensive product suite ESG integrated with Customer business management centricity People Tec
Slide 24: Most partnerable Company
Most partnerable Company • ~48% of savings policies ICICI Pru Stack issued on same day in Array of platform H1-FY2025 capabilities to help • Same day commission us deliver superior available for select value propositions distributors to our customers, in collaboration • New distribution partner with
Slide 25: Distribution reach & strategy
Distribution reach & strategy 45 banks 29% | Bancassurance 1 Strategy: Build profitability 1,200+ Partnerships 16%1 | Direct • 2 bank tie-ups done in H1-FY2025 11%1 | Partnership Distribution Strategy: Digital focused • Access to ~22,000 bank branches Strategy: Create depth & upsell campaigns • Prot
Slide 26: 'C'ompetency: Operational efficiency
‘C’ompetency: Operational efficiency Comprehensive product suite ESG integrated with Customer business management centricity People Tech Analytics Diversified Operational distribution efficiency • Enable simplified & Risk & Prudence frictionless processes across policy life cycle 26
Slide 27: Simplified & frictionless onboarding process
Simplified & frictionless onboarding process Leveraging external data Financial underwriting through sources for KYC ecosystem enablers Digital consent (CKYC & Aadhaar) • EPFO, Vahan, Digital GST, ITR and MF based eKYC, Bank pre population statement for income estimation • Document processing throug
Slide 28: Excellence at every stage
Excellence at every stage Onboarding Payouts Simplified digital Deliver quick, secure, customer onboarding seamless payout • Same day issuance of experience savings policies: 48% • Digital payout: 92.3% • Digital KYC1: 85% Persistency Claims3 Seamless renewal Single day claim settlement payments usi
Slide 29: 3C Framework
3C Framework Customer centricity Competency Catalyst Comprehensive product suite ESG integrated with Customer business management centricity People Tech Analytics Diversified Operational distribution efficiency Risk & Prudence 29
Slide 30: People strategy aligned to business strategy
People People strategy aligned to business strategy Impact on leadership 77% 91% 100% Building capacity for Leadership cover2 growth Leadership stability Leadership depth1 Leadership positions with More than 10 years vintage More than 3 job rotations adequate cover Supportive environment Impact on c
Slide 31: Leveraging technology to deliver value
Technology Leveraging technology to deliver value 99% digital logins & 100% ~9 mn digital service e-insurance account for interactions every month eligible base 96.4% service interactions are via self-help / digital 3.3 mn+ app downloads modes 98% of pages with system uptime of more than 99.85% High
Slide 32: Technology enabled new business & growth
Technology Technology enabled new business & growth Pre-sales Onboarding & issuance Partner integration • Collaboration platform • InstaPlan • Retail partners: Online meetings, joint sales calls, Pre-sales tool to create customised Partner integration portal | Easy UI invite experts & share content
Slide 33: Technology enabled customer service & claims
Technology Technology enabled customer service & claims Empowering customers Omni channel • Self service • Customer mobile application 1. ~9 mn digital service interactions monthly 3.3 mn+ app downloads with best app rating among the 2. >96.4% service interactions are via self-help/ digital modes pe
Slide 34: Analytics powering new business
Analytics Analytics powering new business Understanding Satisfying Identifying right Seamless process customer customer need distribution Intelligent Product ML based Longevity & risk customer recommendation upsell/cross sell profiling models segmentation engine propensity models Micro market Person
Slide 35: Analytics powering business & product
Analytics Analytics powering business & product Agency Banca/PD Direct Product Analytics driven Analytics driven ML based leads Geographic agent activation campaign strategy assistance product segments Incentives efficacy Pre-issuance Personalised online Market household framework journey integratio
Slide 36: Analytics powering customer service & claims
Analytics Analytics powering customer service & claims Enabling Driving customer Faster settlement Managing maturity renewals satisfaction of claims & foreclosure ML based lapse Early warning Robust claims Smart propensity model model for customer investigation reinvestment dissatisfaction framework
Slide 37: AI & ML fueling business excellence
Analytics AI & ML fueling business excellence Persistency management AI based risk management Focus on extensive utilisation of AI & ML along Utilising AI across policy life stages to provide with data analytics to mitigate insurance risk at superior customer experience onboarding stage Model based
Slide 38: Integrating ESG into business management
ESG Integrating ESG into business management Disclosure under IR1 E S G ESG rating by MSCI framework FY2024 nvironmental ocial overnance Integrated Focus areas AA AA annual report since FY2020 • Environment • Human • Governance & A A capital business • Responsible ethics investing • Data privacy B •
Slide 39: Agenda
Agenda • Company strategy & performance • Opportunity & industry overview
Slide 40: Opportunities in the Indian life insurance industry
Opportunities in the Indian life insurance industry Long-term savings Protection Strong multi-decadal Steady growth opportunity growth opportunity • Significant allocation: 60% of household savings • Protection gap of $16.5 tn for FY20202 towards financial assets for FY20231 • ~15%3 of addressable p
Slide 41: Favorable demography
Long-term savings Favorable demography opportunity Large & growing population base1 High share of working population in India1 Population in mn Population in mn (age group 25-59 years ) 1,407.6 1,425.9 736.1 273.8 337.0 124.6 145.1 214.3 645.6 51.8 59.4 India Japan Brazil Indonesia S Korea USA S Afr
Slide 42: Financialisation of savings
Long-term savings Financialisation of savings opportunity Household savings1 Distribution of financial savings (including currency)2 80% 85 71% ` tn 61% 63% 65 57% 52% 56% 60% 60% 17% 52% 18% 17% 45% 41% 17% 17% 18% 45 40% 35.46 36% 20.86 28.28 39% 17% 23.70 40% 19.54 25 13.64 29% 14.53 31.09 20.61
Slide 43: Low protection penetration opportunity
Protection Low protection penetration opportunity Sum assured as % of GDP1,2 Addressable population# Protection gap(%)4,5 332% coverage3 (%) 83 61 55 54 76 71 74 55 252% 251% 16.5 153% 143% 15% 127% 8.4 USD tn 3.9 21% 2.8 2.0 0.9 0.7 0.6 Thailand* USA* Japan* South Korea* India** Malaysia* Singapore
Slide 44: Low sum assured as % of GDP opportunity
Protection Low sum assured (SA) as % of GDP opportunity A SA as % of GDP (SA growth @ 20% CAGR) SA as % of GDP1,2 65% 332% India: FY2035 39% 252% 251% 21% 25% B 153% 143% A 127% 107% FY2023 FY2025 FY2030 FY2035 65% 21% B SA as % of GDP (SA growth @ 25% CAGR) Thailand Singapore South Korea (25%CAGR)*
Slide 45: Addressable population (%) opportunity
Protection Addressable population (%) opportunity 15% CAGR in new policy count1 20% CAGR in new policy count1 143.3 143.3 102.2 102.2 72.8 72.8 63.6 63.6 29% 41% in mn in mn 59.3 40.9 24.8 20.9 9.3 11.7 9.3 11.4 FY2023 FY2025 FY2030 FY2035 FY2023 FY2025 FY2030 FY2035 Insured Uninsured Insured Uninsu
Slide 46: Strong growth in retail credit
Protection Strong growth in retail credit opportunity Retail credit1 ₹ bn 40,852 33,870 21,488 25,534 17,026 19,085 12,144 13,922 9,339 10,097 6,454 19,364 4,711 16,844 13,390 7,468 9,746 5,386 Mar'14 Mar'16 Mar'18 Mar'20 Mar'22 Mar'23 Home Loans Others • Healthy growth in retail credit • Credit lif
Slide 47: Rising retirement population in India
Retirement Rising retirement population in India opportunity Demography shift over next ~25 years1 Faster growth of ageing population2 Age group 2024 2050 100+ 95-99 Future client 90-94 ~35% of the base seeking 85-89 overall annuity population income 234 80-84 75-79 Today’s 70-74 client base 65-69 ~
Slide 48: Retirement needs under-served
Retirement Retirement needs under-served opportunity Retirement savings gap projections1 Pension assets/GDP2 5.0% 7.4% 3.7% 2.3% 9.6% 159.0% Projected retirement savings gap widening CAGR 145.0% 132.1% $ tn 170 130 80.0% 96 64.5% 56.0% 46 32 19 22 12.8% 12 12 8 6.5% US China UK Japan India 2022 2050
Slide 49: Indicators of health opportunity
Health Indicators of health opportunity opportunity Health insurance premium trend1 % of population covered by health schemes2 ₹ bn Uncovered 895 population 731 253 30% 582 508 200 449 151 252 137 201 51% 107 159 107 124 329 391 9% 235 246 272 10% FY2019 FY2020 FY2021 FY2022 FY2023 Government Privat
Slide 50: Evolution of life insurance industry in India
Evolution of life insurance industry in India Industry overview FY2002 FY2010 FY2015 FY2023 21.5% (5.8%) New business premium1 (` bn) 116 550 408 12.4% 1,040 11.5% Total premium (` bn) 501 23.2% 2,654 4.3% 3,281 7,825 Penetration (as % to GDP) 2.1% 4.1% 2.6% 3.0% 12.6% 11.0% Assets under management
Slide 51: Historical product & channel mix
Historical product & channel mix IndustryIndustry overviewoverview Industry Private sector 18% 20% 22% 19% 44% 39% 40% 32% Product mix1 Linked 82% 80% 78% 81% Non-linked 56% 61% 60% 68% FY2020 FY2021 FY2022 FY2023 FY2020 FY2021 FY2022 FY2023 12% 13% 13% 14% 22% 22% 22% 24% Channel mix2 28% 29% 32% 3
Slide 52: Annexures: Others
Annexures: Others
Slide 53: Awards & Accolades: Q2-FY2025 (1/2)
Awards & Accolades: Q2-FY2025 (1/2) Outstanding Customer Digital Insurer of the year Team of the year Best Life Insurer Service ASSOCHAM Excellence ASSOCHAM Excellence Insurance Asia News- Insurance Asia News- Awards 2024 Awards 2024 Country Awards 2024 Country Awards 2024 Excellence in claim Best M
Slide 54: Awards & Accolades: Q2-FY2025 (2/2)
Awards & Accolades: Q2-FY2025 (2/2) Best ESG programme / Great Indian ESG organisation Best ESG Report Best sustainable use of ESG Practices of the year - Insurance CMO Asia CMO Asia CMO Asia Transformance Forums Best in Training & Organizational Innovation in Retention Strategy Development National
Slide 55: Retirement focus: ICICI Pru PFM
Retirement focus: ICICI Pru PFM Total subscribers Assets under management Net inflows growth growth growth 26% 35% 53% 94% 43% 231% Y-o-Y Y-o-Y Y-o-Y 74.72 ₹ billion ₹ billion in ‘000 868 392.92 642 202.74 22.58 Sep-23 Sep-24 Sep-23 Sep-24 H1-FY2024 H1-FY2025 40% of NPS retirement corpus mandated fo
Slide 56: Trend in protection APE
Trend in protection APE FY2022 FY2023 FY2024 ₹ 3.94 bn | ₹ 3.26 bn | ₹ 4.78 bn | ₹ 5.67 bn | Retail ₹ 6.97 bn | Retail ₹ 4.45 bn | Retail Group term protection Group term protection Group term protection 43.2% 30.0% 46.3% 21.7% 29.2% 31.3% ₹ 13.13 bn ₹ 15.04 bn ₹ 15.25 bn ₹ 3.52 bn | ₹ 4.81 bn | ₹ 6
Slide 57: Interest rate risk management
Interest rate risk management Guaranteed return savings product • Derivatives used to lock in yields for future premiums • Underlying bonds for derivatives selected based on tenure of liability Retail protection business • Asset liability duration matching Annuity products • Duration matching & cash
Slide 58: Retail persistency: FY2024
Retail persistency: FY2024 Persistency across product categories 13th month 49th month 88.4% 88.8% 91.6% 83.0% 84.4% 65.9% Linked Non linked Protection Persistency across channel categories 13th month 49th month 91.7% 91.3% 90.9% 76.8% 83.7% 83.4% 68.4% 66.5% Agency Direct Bancassurance Partnership
Slide 59: Value of New Business (VNB)
Value of New Business (VNB) VNB contribution* VNB margin movement 32.0% (1.5)% FY2023 FY2024 (4.1)% (1.8)% VNB 24.6% ` billion 27.65 22.27 2.01 2.61 (7.3%) (11.7%) 10.87 11.44 (39.3%) (51.4%) 14.77 8.22 (53.4%) (36.9%) FY2023 Business Operating Economic FY2024 Mix Assumptions Assumptions Protection
Slide 60: Average APE by product categories
Average APE by product categories Average policy term* (years) 34 35 Segment (₹) FY2023 FY2024 17 19 ULIP 177,057 182,940 Savings Protection Non-linked savings 119,748 114,033 Average customer age* (years) Protection 23,086 36,284 43 43 35 35 Total 118,928 130,593 Savings Protection FY2023 FY2024 *
Slide 61: Channel wise product mix
Channel wise product mix1 Channel category Product category FY2022 FY2023 FY2024 ULIP 70.7% 57.0% 58.6% Non-linked savings 19.2% 31.7% 30.3% Bancassurance Annuity 4.9% 7.3% 5.2% Protection 5.2% 4.0% 5.9% Total 100.0% 100.0% 100.0% ULIP 42.6% 35.6% 46.0% Non-linked savings 48.8% 55.4% 30.6% Agency An
Slide 62: Product wise channel mix
Product wise channel mix1 Product category Channel category FY2022 FY2023 FY2024 Bancassurance 57.0% 46.6% 38.8% Agency 20.8% 26.1% 31.0% ULIP Direct 19.6% 23.7% 24.6% Partnership distribution 2.6% 3.6% 5.5% Total 100.0% 100.0% 100.0% Bancassurance 27.3% 25.0% 33.6% Agency 42.1% 39.1% 34.5% Non-link
Slide 63: Annexures: Embedded value
Annexures: Embedded value
Slide 64: Analysis of movement in EV
Analysis of movement in EV 16.91 (0.06) 423.37 22.27 (0.56) (2.88) 0.00 (0.08) 30.71 0.70 356.34 ANW EVOP1 = 50.17 115.80 ANW ROEV2 = 14.1% 87.82 ₹ billion VIF VIF 307.56 268.52 EV (Mar 31, Unwind Operating VNB Persistency Mortality Expense Other Economic Net Capital EV (Mar 31, 2023) Assumption var
Slide 65: Analysis of movement in EV
Analysis of movement in EV1 ` billion FY2020 FY2021 FY2022 FY2023 FY2024 Opening EV 216.23 230.30 291.06 316.25 356.34 Unwind 17.25 16.61 20.85 27.08 30.71 Value of New Business (VNB) 16.05 16.21 21.63 27.65 22.27 Operating assumption changes + Operating variance (0.42) 2.24 (10.56) 0.15 (2.81) Oper
Slide 66: Sensitivity analysis
Sensitivity analysis % change in VNB % change in EV Scenario FY2023 FY2024 FY2023 FY2024 Increase in 100 bps in the reference rates (4.2) (11.7) (3.5) (3.5) Decrease in 100 bps in the reference rates 4.8 10.9 3.7 3.8 10% increase in the discontinuance rates (3.4) (4.8) (0.5) (0.4) 10% decrease in th
Slide 67: Economic assumptions underlying EV & VNB
Economic assumptions underlying EV & VNB Reference rates Tenor (years) March 31, 2024 September 30, 2024 1 7.2% 6.7% 5 7.3% 6.9% 10 7.2% 7.1% 15 7.3% 7.2% 20 7.3% 7.2% 25 7.4% 7.3% 30 7.4% 7.3% EV: Embedded value VNB: Value of new business 67
Slide 68: Glossary (1/2)
Glossary (1/2) • Annualized Premium Equivalent (APE): APE is the sum of the annualized first year premiums on regular premium policies, & ten percent of single premiums, from both individual & group customers • Retail Weighted Received Premium (RWRP): Premiums actually received by the insurers under
Slide 69: Glossary (2/2)
Glossary (2/2) • Value of New Business (VNB): VNB is used to measure profitability of the new business written in a period. It is present value of all future profits to shareholders measured at the time of writing of the new business contract. Future profits are computed based on long-term assumptio
Slide 70: Safe harbour
Safe harbour Except for the historical information contained herein, statements in this release which contain words or phrases such as 'will', 'would', ‘indicating’, ‘expected to’ etc., & similar expressions or variations of such expressions may constitute 'forward-looking statements'. These forward
Slide 71: Thank you
Thank you FY2024 Annual Sustainability FY2024 ESG Report factsheet Report
ICICI Prudential Life Insurance Company — H1-FY2025 Earnings Presentation on 6ix